Week in Review

Teenagers typically vote Democrat. In part because of the liberal bias in our public schools. And in our colleges. As well as in the mainstream media. In Hollywood. In television. And the music industry. These things do a lot to shape the way our kids think. But there is another reason why our kids become Democrat voters. Because it is the left that is handing out free birth control. While their parents say ‘no’ the left says ‘go ahead. Have fun.’ And then there is the push by the left to decriminalize marijuana. Something else these kids’ parents say ‘no’ to. While the left says ‘go ahead. Have fun.’ Even if it may be harmful to them. For what’s a few burnt brain cells in exchange for the youth vote (see Pot’s march toward mainstream by Alicia A. Caldwell And Nancy Benac, The Associated Press, posted 7/27/2013 on The Vancouver Sun)?

It is a moment in the U.S. that is rife with contradictions: People are looking more kindly on marijuana even as science reveals more about the drug’s potential dangers, particularly for young people…

Exploration of the potential medical benefit is limited by high U.S. government hurdles to research. Washington policy-makers seem reluctant to deal with any of it.

So we know it’s bad for the children. But we really don’t know how bad. For it is the only medicine (medical marijuana) ever allowed without proving the drug through clinical trials. To make sure the drug works. And it doesn’t cause irrevocable harm. No pharmaceutical is allowed this luxury when bringing a new drug to market. And we know how dangerous cigarettes and alcohol are. But not marijuana. No. That drug we just accept on faith that it will cure us. Besides just giving us a great high.

Opponents of pot are particularly worried that legalization will result in increased use by young people.

“There’s no real win on this from a political perspective,” says Sabet. “Do you want to be the president that stops a popular cause, especially a cause that’s popular within your own party? Or do you want to be the president that enables youth drug use that will have ramifications down the road?”

If anyone legalizes it will be the left. Who are always attacking the right for hating children whenever they say we can’t afford to spend any more money. But smoking pot harms kids. And the left is okay with that.

“Having a regulated system is the only way to ensure that we’re not ceding control of this popular substance to the criminal market and to black marketeers,” says Aaron Smith, executive director of the National Cannabis Industry Association, a trade group for legal pot businesses in the U.S. See Change Research, which analyzes the marijuana business, has estimated the national U.S. market for medical marijuana alone at $1.7 billion for 2011 and has projected it could reach $8.9 billion in five years. Overall, marijuana users spend tens of billions of dollars a year on pot, experts believe…

In Washington state, the Liquor Control Board is drawing up rules covering everything from how plants will be grown to how many stores will be allowed. It expects to issue licences for growers and processors in December, and impose 25 per cent taxes three times over – when pot is grown, processed and sold to consumers…

Marijuana advocates in Washington state…have projected the legal pot market could bring the state a half-billion a year in revenue…

Decriminalizing marijuana will make it easier for kids to smoke it. Because it’s easier to get things that are only illegal for people under a legal age. As opposed to being completely illegal. Kids aren’t legally allowed to smoke cigarettes but they do. In fact, it is fair to say kids smoke more cigarettes than marijuana. Because cigarettes aren’t completely illegal. They’re only illegal for kids.

So cities suffering under the crushing costs of their public sectors are looking at a windfall of tax revenue by decriminalizing marijuana. And don’t seem to have a problem of people spending more of their money on getting high instead of saving for their retirement. Paying for their kids’ education. Or putting food on the table. It was the same thing when cities scrambled to legalize gambling. Because they wanted the tax revenue. Despite people gambling away money that they should have spent on their family. No doubt these cities would be disappointed if more kids didn’t start smoking marijuana. So that when they grew into adults they would already have a healthy drug habit the city could tax. To help pay for the crushing costs of their public sectors.

Of course, the states and cities will never see those rosy projections of tax revenue. Because when they “impose 25 per cent taxes three times over” they will raise the price of legal marijuana so much that it will benefit, not hurt, the black market for marijuana. Even if the black market price is below the official taxed price. Why? Because people smuggling cigarettes from a low-tax state to a high-tax state don’t do the time drug dealers do when caught. Encouraging more people to sell a legal substance illegally. To cheat the state out of that tax revenue. And pot smokers, especially the kids, will turn to the black market for their pot. Where it will be even more readily available when the growing, transporting and selling of marijuana is no longer illegal. Like cigarettes. Which kids have no problem buying.

California steps back California’s experience with medical marijuana offers a window into pitfalls that can come with wider availability of pot.

Dispensaries for medical marijuana have proliferated in the state, and regulation has been lax, prompting a number of cities in the state to ban dispensaries…

In May, the California Supreme Court ruled that cities and counties can ban medical marijuana dispensaries.

A few weeks later, Los Angeles voters approved a ballot measure that limits the number of pot shops in the city to 135, down from an estimated high of about 1,000. By contrast, whitepages. com lists 112 Starbucks in the city…

In 2010, California voters opted against legalizing marijuana for recreational use, drawing the line at medical use.

But Jeffrey Dunn, a Southern California lawyer who has represented cities in pot cases, says that in reality the state’s dispensaries have been operating so loosely that already “it’s really all-access.”

“What we’ve learned is, it is very difficult if not impossible to regulate these facilities,” he said.

The people may have voted for marijuana in California. But the people didn’t like living in a Cheech and Chong movie surrounded by stoners. And seeing a pot shop every time they turned around. Which is the last thing a parent wants. To have it so much easier for their kids to smoke pot. Or eat it.

A Denver-area hospital, for example, saw children getting sick after eating treats and other foods made with marijuana in the two years after a 2009 federal policy change led to a surge in medical marijuana use, according to a study in JAMA Pediatrics in May. In the preceding four years, the hospital had no such cases.

The Colorado Education Department reported a sharp rise in drugrelated suspensions and expulsions after medical marijuana took off.

“What we’re doing is not working,” says Dr. Christian Thurstone, a psychiatrist whose Denver youth substance abuse treatment centre has seen referrals for marijuana double since September. In addition, he sees young people becoming increasingly reluctant to be treated, arguing that it can’t be bad for them if it’s legal.

You decriminalize marijuana and, of course, kids will see that as an admission from the state that smoking pot can’t be bad for you. So more kids use the drug. Ending up in the hospital. Getting suspended or expelled from school. Or in drug rehab for a pot addiction. But the left is okay with this. Because, after all, it is the right that hates kids. Whereas the left is the cool uncle that will let their niece and/or nephew smoke a joint. Which is why the kids love the left. They are always helping them do things their parents won’t let them do.

Legalization foes Opponents counter with a 2012 study finding that regular use of marijuana during teen years can lead to a long-term drop in IQ, and another study indicating marijuana use can induce and exacerbate psychotic illness in susceptible people. They question the notion that regulating pot will bring in big money, saying revenue estimates are grossly exaggerated…

They warn that baby boomers who draw on their own innocuous experiences with pot are overlooking the much higher potency of today’s marijuana.

In 2009, concentrations of THC, the psychoactive ingredient in pot, averaged close to 10 per cent in marijuana, compared with about four per cent in the 1980s, according to the National Institute on Drug Abuse.

So the left will sacrifice our children for money. So they can pay for those costly public sectors breaking their budgets. They won’t take on the public sector unions. But they will sacrifice our kids. Because kids don’t pay taxes. Or vote. Yet. But when they do they hope they will remember their cool uncle when in the voting booth.

The baby boomers, who filled the theaters watching Cheech and Chong movies, look back to their days of pot smoking with nostalgia. Thinking they turned out all right. And so will the younger generation. As they anxiously wait for the decriminalization of marijuana so they can buy more. And smoke more. Loving the high potency of the new stuff. Not at all like the stuff they grew up smoking. Which still fried their brains. Providing a head start to what dementia will do to them as they reach their golden years.

Kids will on average start smoking at an earlier age. More of them will smoke because if it’s legal it can’t be bad for you. And they will be smoking a more potent marijuana than their parents smoked. Accelerating the damage pot smoking will do to them compared to what it did to their parents. But the left is okay with that. Because it is the right that hates the children. Not the cool uncle. At least that’s how the youth vote will see it. Which is all that matters to the left.

LBJ was going to end poverty. He declared war on it. His soldiers? Dollars. Lots of them. His battle plan? The Great Society. Tactics? Just throw lots of money at a problem. Hope that some of it actually hit its target. And further hope that some of the money that did hit its target actually did something beneficial. Just hope for the best.

And thus grew the welfare state. The recipients liked it. Because they were the recipients. Government liked it. Because the recipients liked it. Who voted for them out of gratitude. And dependency. And the Keynesian economists liked it. Because government spending was stimulus. And they love stimulus. These Keynesian economists. So everybody kept asking for more. As no one saw the harm in printing money to make people feel good.

The Keynesian said this was proof that a manageable amount of continuous inflation (printing money) would do away with the business cycle. The boom and bust that had recurring good times. And recurring recessions. They said let’s just have a continuous boom. When real demand fell just create artificial demand by having the government step in. Let the government stimulate demand by printing money to spend. And they did. GDP went up. Thus proving their theory. Or so they thought. Until they realized printing all that money had so weakened the dollar that interests rates soared. To double digits. As did prices. Giving us double digit inflation rates. And stagflation. That’s why the economy sucked in the Seventies. And why Jimmy Carter was a one term president.

Bad Monetary Policy gave us Cheap Money, the Housing Bubble and the Subprime Mortgage Crisis

After the dot-com bubble burst the economy went into recession. So the government went to their patented recession cure-all. Monetary policy. Playing with interest rates. I.e., printing money. Because housing sales have always been the key to a growing economy. Because building a house generates a lot of economic activity. And furnishing a house generates even more economic activity. So the best way to kick-start the economy was to get more people into houses. The more the better. Whether they could afford to or not. Because no matter what happens, people always pay their mortgage.

So the government kept interest rates low. Artificially low. To encourage people to borrow money. To buy housees. And they did. But not enough of them did. Poor people weren’t buying. Mortgage bankers were turning them down. Because they couldn’t qualify for a mortgage. So the government pressured them to approve people even if they didn’t qualify. Fannie Mae and Freddie Mac guaranteed these risky mortgages. Then bought them. It worked. Thanks to ARMs and no-doc mortgages, anyone could walk in off the street and get a cheap mortgage with little down. The people liked it. And asked for more. Thus began the housing boom.

People were buying and selling houses like there was no tomorrow. Investors were flipping homes. People were moving up into McMansions. Bidding the price of houses into the stratosphere. Paying whatever the price was. Because the money was so cheap to borrow. Artificially low. Which really inflated the price of these houses. To unsustainable levels. Until the bubble burst. And these prices began to correct to reflect reality. The Fed, waking up the next morning in a stupor, saw what they had done. And desperately tried to fix things. To limit the damage. They raised interest rates. ARMs reset. And the great Subprime Mortgage Crisis began. And thanks to Fannie and Freddie buying those risky mortgages, the contagion spread around the world. To everyone who bought what they thought were safe investments backed by safe mortgages. Because people always paid their mortgages. But were, in fact, backed by the riskiest of all investments. Defaulting subprime mortgages.

The Social Democracies’ Spending gave European Countries Staggering Debt and a Sovereign Debt Crisis

Karl Marx was a German. But his theories quickly swept across the Rhine. Soon there were communists everywhere in the West. After World II, when communism became the new enemy, Western Europe favored something called social democracies. Communism-light. The social welfare state. Cradle to the grave nanny state. With generous state benefits. National health care. Pensions. You name it. And the state gave it.

People liked it. Asked for more. And their governments were glad to oblige. They spent more and more money. Rather, they spent more and more of the taxpayers’ money. These social democracies had some of the highest tax rates. Which was fine with the poor receiving these generous state benefits. But it explains why anti-capitalists like John Lennon and Bono moved out of the UK. To escape the high taxes on the wealth they created with free marketcapitalism. So there was a capital flight out of these social democracies. While at the same time their public sectors grew. More and more people worked for the government. Received government pay and benefits. And generous pensions. The people liked this. And asked for more. Except Lennon and Bono, of course. And the other superrich who fled these social democracies.

As tax rates climb and capital flees, though, economic activity stagnates. Which forces these countries to borrow. And borrow some of them did. Some of the smaller countries in the Eurozone (Greece) are so in debt that they can’t even roll over their existing debt. They are in such a mess that no one wants to take a chance loaning them money. Because no one thinks Greece will ever be able to repay whatever they borrow. Of course, with the common currency (Euro), Greece’s problems are everyone’s problems. So the richer countries in the Eurozone (Germany) are pouring money into the ECB to try and rescue Greece. And save the Euro. What we call the European sovereign debt crisis. While the world waits with bated breath. Because if they fail it could very well plunge the world into another severe recession. Or worse. Because the world needs the Eurozone. To buy their exports. So they can prop up their own sick economies.

Class Warfare pits the Rich against the Poor and Middle Class, the Taxpayers against the Public Sector

Many, if not all, of the great crises countries have…are…going through is because of bad monetary policy. Using the power of the purse to make happy voters. Whatever the cost. For they were always sure they could avoid paying this cost. That they could always keep pushing this cost off onto a future generation. But the spending grew too great. The debt grew too high. And, before they knew it, that future generation was here. And it’s us.

The people grew fat and lazy on these generous benefits. And they never worried about the cost. Because the cost was always someone else’s problem. Until now. Not only are they losing some of these generous benefits. But they now have to pay for some of them. The cost being so great that everyone has to pay their ‘fair’ share. Which was fair when ‘everyone’ didn’t include them. But it now includes them. And they don’t like it one bit. So they’ve taken to the streets throughout Europe. Rioting here. Protesting there. And demanding that the rich (anyone who is not them) pay more in taxes so they can continue to live the good life. All funded courtesy of the taxpayers. Who aren’t. Living the good life.

So class warfare escalates. Pitting the rich against the poor and middle class. And the taxpayers against the public sector. Placing these countries on the brink of anarchy. All because the people learned that they could vote themselves money. And did. They got everything they asked for. Including something they didn’t bargain for. The destruction of their countries.

The departing White House economist, Larry Summers, says that if it wasn’t for President Obama, the economy would be in a mess. Unlike the near 10% unemployment stagnant cesspool it currently is. Others say he may have stabilized the economy, but he is smothering the recovery because of the patent anti-business policies of the Obama Administration (see Judging Obama’s economics by Robert J. Samuelson posted 1/3/2011 on The Washington Post).

The trouble is that Obama, having stabilized the economy, weakened the recovery. What’s missing from Summers’s valedictory is any sense of contradiction between the administration’s ambitious social and regulatory agenda and the business confidence necessary for hiring and investing. Of course, the connections existed. The health-care law raises hiring costs by requiring in 2014 that all firms with more than 50 employees provide health insurance or be fined. The law brims with complexities and uncertainties that make it hard to estimate the ultimate costs. Will firms with, say, 47 workers eagerly expand beyond 50 if that imposes all the extra costs? It seems doubtful.

Woe to the business owner after 2 years of President Obama. Obamacare. It’s going to cost business big. But how big no one knows. Even the people who wrote that monstrosity. As Dave Barry so eloquently wrote (see Dave Barry’s 2010 Year in Review posted 1/3/2011 in the Miami Herald).

The centerpiece of this effort is a historic bill that will either (a) guarantee everybody excellent free health care, or (b) permit federal bureaucrats to club old people to death. Nobody knows which, because nobody has read the bill, which in printed form has the same mass as a UPS truck.

In a word, uncertainty. It’s anyone’s guess. And that’s a pretty big variable to put into a business plan. Better to circle the wagons and wait and see. And by wait and see I mean don’t expand. Don’t build. Don’t hire.

High Unemployment and High Taxes – They Usually go Together

On the Jan. 2, 2011, edition of NBC’s Meet the Press, Sen.-elect Pat Toomey, R-Pa., cited a striking statistic in urging the United States to lower its corporate tax rates.

That striking statistic?

“We should be lowering corporate tax rates because we have the highest in the world right now.”

They fact checked. There are different taxes to look at (statutory, effective, excise, payroll, etc.). Their conclusion?

Still, if you rate Toomey on his specific wording by looking at “corporate tax rates,” he’s right that the U.S. does now have the highest corporate tax rates on the books, at least among the biggest industrialized democracies, which is most economists’ typical yardstick. So we rate his statement Mostly True.

Uncertainty. High taxes. And they wonder why unemployment hovers at 10%.

Tax and Spend Creates Business Uncertainty

And taxes won’t be coming down any time soon with the Obama administration. The national debt has never been higher (see National Debt Tops $14 Trillion by Mark Knoller posted 1/3/2011 on CBS News). And the Obama administration wants to raise the debt ceiling. Because they want to keep on spending.

You need to pay for spending. With debt, printing or taxes. All of which will add cost to business. More debt increases interest rates. Printing money causes price inflation. Taxes just plain add costs. And they pass all those costs on to you. The consumer.

But it’s the uncertainty that plagues business. Yes, it’s bad. But will it get worse? Probably. So business hunkers down. They don’t expand. They don’t build. And they don’t hire. Not for the indefinite future. Until they have some sense of what’s to come.

To Save Obamacare Obama Tries to Hide the Facts

Even the Obama administration know they’re not helping the economy. And they know that Obamacare is a train wreck. So they’re doing everything they can to lie to the people. To get their propaganda front and center. How? They’re paying Google with our tax dollars to alter ‘Obamacare’ search results (see HHS is Paying Google with Taxpayer Money to Alter ‘Obamacare’ Search Results by Jeffrey H. Anderson posted 1/3/2011 on the Weekly Standard).

Obamacare is bad. Even they know it. So they’re trying to control Internet content. Scary, isn’t it? Censorship can’t be far behind.

A Snow Crisis is a Terrible Thing to Waste

FDR exploded the size of Big Government. He gave birth to the nanny state. But one thing he didn’t do was to neuter private business. And empower the public sector employees. He knew if you were going to partner with Big Labor you needed big taxes. You get big taxes from businesses. And from their employees. In other words, it all trickles down from business. If you shut down business, you shut down everything.

Today, though, it’s all different. They don’t just take from business. They eviscerate business. To feed the public sector. Who produce nothing. They just consume tax dollars. And live a far better life than you or I. Case in point, the NYC blizzard (see Sanitation Department’s slow snow cleanup was a budget protest by Sally Goldenberg, Larry Celona and Josh Margolin posted 12/30/2010 on the New York Post).

Selfish Sanitation Department bosses from the snow-slammed outer boroughs ordered their drivers to snarl the blizzard cleanup to protest budget cuts — a disastrous move that turned streets into a minefield for emergency-services vehicles, The Post has learned.

That’s your public sector. When the mayor forces them to live like the rest of us they protest vehemently. Taking advantage of a crisis, they paralyze a city. Prevent emergency services from using the streets. Because they’re not happy with wage and benefit packages similar to the private sector. So they protest. And ask for our support in their struggle against unfair labor practices the mayor is using against them.

Solidarity, Brother? Or are you Giving me the Finger?

Even their union brethren have had enough. And that says a lot (see Labor’s Coming Class War by William McGurn posted 1/4/2011 on The Wall Street Journal).

In theory, of course, organized labor is all about fraternal solidarity. For many years, it is true, private-sector unions supported collective-bargaining rights and better benefits for government workers, while public-employee unions supported the private-sector unions in their opposition to legislation such as the North American Free Trade Agreement in the 1990s.

Suddenly, it’s a different world. In this recession, for example, construction workers are suffering from unemployment levels roughly double the national rate, according to a recent analysis of federal jobs data by the Associated General Contractors of America. They are relearning, the hard way, that without a growing economy, all the labor-friendly laws and regulations in the world won’t keep them working.

The union trades are among the biggest group of laid off workers. And while they sit unemployed waiting to pick up a call, the public sector goes on. Living extremely well. And the high taxes to pay those fat wage and benefit packages are killing business. The very business they need to build stuff.

What’s more, “blue-collar union workers are beginning to appreciate that the generous pensions and health benefits going to their counterparts in state and local government are coming out of their pockets,” says Steven Malanga, a senior fellow at the Manhattan Institute. “Not only that, they are beginning to understand the dysfunctional relationship between collective bargaining for government employees and their own job prospects.”

And while the public sector bitches about pay cuts in their jobs, unemployment soars among the union trades. I once complained about my wage and benefits until I met the man who had none. So don’t go looking for the solidarity on the picket lines.

Over in New York, meanwhile, newly inaugurated Gov. Andrew Cuomo faces a similar battle. Mr. Cuomo campaigned on a cap on property taxes and a freeze on state salaries, both anathema to the powerful state-employee unions. As the New York Times reported last month, however, in this showdown Mr. Cuomo may have found a surprising ally in the 100,000- member Building and Construction Trades Council of Greater New York. Maybe not so surprising: The Times says unemployment for these workers is running at 20%.

These union employees at least provide value. They build things. And build them very well. Sure, you can say some are overpaid. And maybe some are. But one thing you can’t say is that they haven’t been sharing any of the sacrifice during these down times. Unlike their public sector brethren.

In some ways, this new appreciation for the private sector is simply back to the future. FDR, for example, warned in 1937 that collective bargaining “cannot be transplanted into the public service.” In the old days, unions understood economic growth. Mr. Malanga points to AFL-CIO President George Meany’s strong support for the JFK tax cuts as an example.

These days the two types of worker inhabit two very different worlds. In the private sector, union workers increasingly pay for more of their own health care, and they have defined contribution pension plans such as 401(k)s. In this they have something fundamental in common even with the fat cats on Wall Street: Both need their companies to succeed.

By contrast, government unions use their political clout to elect those who set their pay: the politicians. In exchange, these unions are rewarded with contracts whose pension and health-care provisions now threaten many municipalities and states with bankruptcy. In response to the crisis, government unions demand more and higher taxes. Which of course makes people who have money less inclined to look to those states to make the investments that create jobs for, say, iron workers, electricians and construction workers.

Big Government and the Public Sector can’t Exist without Business

To tax and spend you need big piles of tax money. Which anti-business policies won’t give you. And raising tax rates will hurt business and consumers alike. Which also won’t give you big piles of tax money. Ditto for excessive government debt and printing money. They all kill economic activity. And we’re killing our economy. Which is shrinking that pile of tax money. And this is causing cities and states budget problems. Requiring a reckoning with their public sector employees. Which is going so badly that the public sector unions are now finding themselves an island unto themselves. No one is feeling pity for these pampered prima donnas. Even their fellow union workers in the building trades are abandoning them.

Things are bad. But they can get worse. If we try to bail out the public sector. We do that and we’ll end up like Greece. The only difference being that there won’t be anyone to bail us out. So that’s not an option. We have to cut spending. Before we end up like Greece.

We need to repeal Obamacare. Cut taxes. And stop attacking business. If we want jobs. And prosperity. For one fundamental truth in life is that business can exist without the public sector. But the public sector can’t exist without business. Someone has to pay all those taxes.

Obamacare Push the Deficit Higher than Reagan’s and Bush’s Combined

Ronald Reagan had deficits of $200 billion. The Left said that was reckless and irresponsible. George W. Bush averaged $800 billion deficits. The Left said that was reckless and irresponsible. Now Obama’s deficits approach $1,500 billion. And the Left says, “Let’s raise the debt ceiling.”

It’s a reckless and irresponsible game Obama, Pelosi and Reid have been playing. During the worst recession since the Great Depression they have gone on a spending orgy. Hoping to pass as much as possible in as short of time as possible. The goal being simple. Get as many people as possible addicted to this new government spending. Make it political suicide for the opposition to repeal. Thereby giving the Democrats yet more things to frighten voters about should Republicans win elections. That those rascally Republicans will take away those benefits they fought so hard to give them.

But they have increased spending to levels impossible to sustain. Medicaid is bankrupting the states. Medicare and Social Security are bankrupting the nation. Despite this, Obama, Pelosi and Reid passed Obamacare. This on top of stimulus spending that stimulated nothing but unions and Democratic loyalists. They’re selling bonds and printing money to feed this orgy of spending. In the process mortgaging our future. And making the United States credit worthiness on par with a subprime mortgage.

“This is not a game. You know, the debt ceiling … is not something to toy with,” Goolsbee told the ABC News program “This Week.” “If we hit the debt ceiling, that’s … essentially defaulting on our obligations, which is totally unprecedented in American history.”

“The impact on the economy would be catastrophic. I mean, that would be a worse financial economic crisis than anything we saw in 2008,” he said.

Interesting. When we get ourselves in trouble by maxing out our credit cards, what do debt counselors tell us? To solve our problem by getting another credit card so we can keep spending? Or do they tell us to cut all of our credit cards and sell everything we own to pay our bills?

When spending gets you in trouble you stop spending. You don’t keep spending. It’s what we the people do. And it’s what our government should do. Because the nation, the states and even our cities are all having spending and debt problems.

Big Government Spending Destroys Some of our Biggest Cities

New Orleans has lost more than a quarter of its population in the past 10 years as the result of Hurricane Katrina. The rest of the cities that have lost major parts of their population have seen their flagship industries, which include coal, steel, oil, and auto-related manufacturing, fall off or completely collapse.

Targeted Tax Cuts and Incentives Don’t Stimulate

The evidence is all around us. Government spending may get you votes in November, but it is bankrupting the nation, the states and the cities. And you don’t fix that problem with more taxing. And more spending. Even liberal Democrats know this (see Goolsbee: Obama to Make ‘Tough Choices’ on Budget by Mary Lu Carnevale posted 1/2/2011 on The Wall Street Journal).

Mr. Goolsbee, chairman of the White House Council of Economic Advisers, said on ABC’s “This Week” that the administration is focusing on spurring investment and improving U.S. exports and innovation to boost economic growth. And he said that steps already taken, such as cutting payroll taxes by two percentage points and giving small businesses new tax incentives, should soon provide some economic fuel.

They know that cutting taxes stimulates the economy. They admit as much by cutting payroll taxes. And by offering tax incentives. But they target everything. It’s never across the board. Because across the board tax cuts don’t offer tit for tat. And what good is a tax cut to a politician if it doesn’t get you something in return?

Repeal Obamacare, Forget about Raising the Debt Ceiling

Cutting taxes will stimulate the economy. It worked for Harding. For Kennedy. For Reagan. And for Bush. Reagan doubled tax receipts with his cuts. But he still had $200 billion deficits. Why? Because the Democratic Congress spent the money faster than it came in. And they reneged on their promised spending cuts. Lesson learned? You have to cut spending.

There’s hope. Thanks to the Republican ascendancy at the 2010 midterm elections. The Republicans have the power of the purse. And a lot of Democrats lost their seats for voting for Obamacare. You add this up, and you can take tough words about repealing Obamacare seriously (see House to vote early on health care repeal by Jake Sherman posted 1/2/2011 on Politico Live).

Incoming House Energy and Commerce Chairman Fred Upton (R-Mich.) says the new Republican-controlled House will look to repeal Democratic health care overhaul legislation before President Barack Obama delivers his State of the Union address later this month.

“We have 242 Republicans,” Upton said on “Fox News Sunday.” “There will be a significant number of Democrats, I think, that will join us.”

Upton, whose committee will key in the GOP’s effort to roll back the law, said that he believes the House may be near the two-thirds majority required to override a presidential veto. Short of repeal, Upton said the House will “go after this bill piece by piece.”

Social Security, Medicare and Medicaid are political third rails. Too many people are dependent on them for significant reform. But Obamacare is a no brainer. No one is dependent on it now. Repealing that will be pain free. Other than a bruised ego. But Obama can get over that. When he retires in 2012.

You repeal Obamacare and our debt crisis all of a sudden gets a whole lot easier to manage. So let’s cut that credit card. Before we build up a balance that we’ll never be able to pay off.